Good CNBC video clip of possible deal between Delta and JP Morgan and Refinery

[Stifler's Mom]

Interesting concept at helping the balance sheet. I also noticed the piece said DAL has a former Conoco exec working for them now.

It also might be worthwhile buying the manufacturer of MD-88 nosewheels too. You can probably save a few bucks by buying them at wholesale instead of retail.

 

[BILL LUMBERG]

Oh Stifler is trying to make a lame attempt at humor by referencing a joke of a video posted earlier on this FI board.

Maybe you might get a high five from your buddies who didn't get the job at Delta either.

 

[xjhawk]

avros are coming back baby!

 

[On Your Six]

Delta Said to Seek 10% Fuel Savings With ConocoPhillips Refinery


By Mary Jane Credeur and Edward Klump - Apr 11, 2012 3:12 PM MT Bloomberg.net




Delta Airlines, whose daily 2011 fuel bill was $32 million, may buy a ConocoPhillips refinery to help save 10 percent on a significant portion of its fuel needs, a person familiar with the matter said.

The companies are in talks over an idled facility in Trainer, Pennsylvania, said two people who declined to be identified because the discussions are private. Delta would get fuel from Trainer and from other refiners in exchange for products made there that Delta doesn’t use, one person said.
ConocoPhillips, squeezed by tighter profit margins at East Coast refineries, has said it will shut the Trainer operation unless it can find a buyer by the end of May. For Atlanta-based Delta, a deal would help shave annual fuel costs that reached $11.8 billion last year for its main jet operations and regional partners, or 36 percent of all spending.

“If Delta can get it for a good price and figure out how to use the rest to lower its costs on a certain number of gallons of fuel, then it’s a good idea,” said Michael Derchin, an analyst at CRT Capital Group LLC in Stamford, Connecticut.


Delta seeks to save 10 percent on fuel tied to the Trainer deal, according to the person familiar with the airline’s strategy. Fuel from that refinery and others linked to the agreement would cover some but not all of the needs at the world’s second-largest carrier, said the person, who didn’t have specifics.


Bank’s Role?

JPMorgan Chase & Co. would help finance the fuel and handle sales of the other products, CNBC reported earlier today, without naming its sources. Jennifer Zuccarelli, a spokeswoman for the New York-based bank, declined to comment, as did Eric Torbenson, a spokesman for Delta, and Rich Johnson, a Conoco Philips spokesman.

“The sales process for the Trainer refinery is confidential and I’m not able to discuss any of the details,”Johnson said in a telephone interview today. “We are still in the process of seeking a buyer for the refinery.”
Johnson reiterated Houston-based ConocoPhillips’s intent to reach a deal by the end of next month.

The Trainer facility, in suburban Philadelphia, has the capacity to refine 185,000 barrels of crude per day according to ConocoPhillips. Gasoline accounted for more than half of the plant’s production capacity as of last year, the company said.

Delta uses about 3.9 billion gallons of jet fuel a year, which translates to about 254,000 barrels a day. A 1-cent a gallon price increase equals $40 million more in costs on an annualized basis. Jet fuelfor immediate delivery in New York Harbor has averaged $3.12 a gallon in the past 12 months. Five years ago today, the trailing 12-month average was $1.94.
Refinery Pressure

Buying the plant may help insulate Delta as ConocoPhillips, Sunoco, Valero Energy, Petro Plus AG and Hess Corp.close or plan to sell refineries along the U.S. East Coast, in Europe and the US Virgin Islands in response to rising crude prices and waning demand.

The plants are disadvantaged because they pay more for imported crude than other U.S. refiners with better access to growing supplies of oil from shale fields in North Dakotaand Texas. Profitability at East Coast refineries fell in 2011 to the lowest point in nine years, according to data compiled by Bloomberg.

Closing all the refineries under pressure in the region would erase more than 51 percent of U.S. East Coast refining capacity, according to data compiled by Bloomberg.

Delta’s interest in the Trainer plant also may stem from a desire to secure access to supply and blunt cost increases that may come with any shutdowns, said Sandar Cohen, a global transportation fuels analyst and principal with Energy Security Analysis Inc. in Wakefield, Massachusetts.
“They may save some money on their fuel costs, but the question is whether the stress and costs of running a refinery is outweighed by having your own boutique jet-fuel provider,”Cohan said in a telephone interview today.

To contact the reporters on this story: Mary Jane Credeur in Atlanta Edward Klump in Houston To contact the editors responsible for this story: Ed Dufner at Bloomberg.net; Susan Warren at Bloomberg.net.



Godspeed!


The OYSter

 

[Stifler's Mom]

Oh Stifler is trying to make a lame attempt at humor by referencing a joke of a video posted earlier on this FI board.

Maybe you might get a high five from your buddies who didn't get the job at Delta either.

Billdo, you didn't like my joke?

 

[Scoot 11]

Oh Stifler is trying to make a lame attempt at humor by referencing a joke of a video posted earlier on this FI board.

Maybe you might get a high five from your buddies who didn't get the job at Delta either.

The childish behavior around here is deplorable.
But...I gotta say, that one was pretty funny!:laugh:

 

[180ToTheMarker]

While we're at it lets get the Biscoff factory

 

[Captain Morgan]

All you need is a few pizza's and grab bag's to the right government officials.